2011 September

How to Buy a Home

Filed under: bella vista real estate,center city real estate,Of Interest to Sellers,Of Interst to Buyers — Center City Real Estate Agent @ 10:43 am

I am a buyer’s agent specialist in Center City Philadelphia and of my buyers I would say 50% or more are first time home buyers. I love the fact that I get to work with people and educate them on the home buying process. This is the biggest financial transaction you will ever enter into. (Scary) It never fails that on our first tour I get asked all kinds of questions and one is always the same…..”Zach, what happens when we find the house/condo that we want? What are the steps we should take?” I love this question!

Really, it’s quite simple. Depending on how much you have been in contact with your Realtor before your first tour, you might be pre-approved or pre-qualified already. If you aren’t, this is step one. It will keep you from wasting any one’s time especially yours. To get pre-approved just contact a local mortgage consultant, if you don’t know anyone, I am sure your agent will have numerous people he can refer you. The mortgage consultant will get your information and run credit and all that jazz. He/she will send you a pre-approval letter that will qualify you for a mortgage with an amount on it. This can usually be adjusted a little bit if needed. If you have a pre-approval letter with our Mortgage company, (Trident Mortgage Company) it’s as good as gold! This is a must as this letter should accompany any offer you plan on submitting.

You have now been given the “green light” to pull the trigger on any property that fits your wants/needs in that price range. You will now start to concentrate on finding the perfect home. Make sure to keep your Realtor posted, let them know exactly what your wants/needs are, what are deal-breakers and what doesn’t matter. This will really help your agent narrow the search and hone in on properties that fit you! This will save a lot of time and frustration. Remember that even in a “down market”, if a home is priced really well, it WILL sell. There are always buyers actively looking.

Ok, so you have found the perfect place for you and your 15 cats……what to do? Easy, talk to your agent and express how you feel. That being said, DON’T ever show your hand. If you are desperate and you would pay a million dollars over asking price, keep that to yourself, because if the other agent gets wind of that, you have just shot yourself in the foot and lost all negotiating power. Time to submit an offer…..(In the state of PA all offers must be accompanied by a $1000 good faith check made out to the listing agency). There is no real way to come up with a number for an offer except for looking at the “comps.” Comparables or “comps” are properties that are similar in location, size, layout, bed and bath count, etc that have sold usually in the last 6-12 months. Sometimes you will have to go back 18 months depending on the building, or type of house. This is your agent’s job BTW. He/she should know the comps before even stepping into a property. If you are looking at a $300,000 house and you have now reviewed the comps and they have all settled for around $283,000, how do you come up with an offer? You don’t want to come in at $283,000. I STRONGLY believe that negotiating is part of the process and will only help the buyer. To come in at your highest and best is not advised, sellers will always want you to come up in price, they want to feel as if they “won” the negotiating battle. (Especially in a down market) So the goal is to get the property around the $283,000 range. In a perfect world it would be equal give and take on both sides of the transaction, with that said, I would suggest a starting offer of $260K-$265K. If you start here and meet in the middle, it will put you right in that range we were trying to hit.

After you have come to a price that both parties agree on, it’s time to sign the revised agreement of sale and push forward with the home inspection, if elected, and any other inspections. If all goes well, in 30-60 days you will be given the keys to your new home. There are obviously a lot of small steps that have been left out of this blog to keep you from falling asleep. For more information contact your Realtor today and bombard them with questions! Be sure to ask about seller’s assist options and FHA vs CONV Financing. If you don’t have an agent, call me and I will be glad to answer all your questions.

Zach Skidmore
www.CenterCityHomes.com / 215.901.7844
Prudential Fox and Roach REALTORS®
530 Walnut St., Suite 260 Philadelphia, PA 19106